unit two

Question 1

ONCE YOU HAVE A $500
EMERGENCY FUND, YOU
SHOULD

Answer 1

SAVE IT UNTIL
YOU HAVE AN EMERGENCY.

Question 2

THE F I RST ST EP YOU
SHOULD T A K E WHEN
YOU WANT TO MA K E A
L ARGE PURCHASE IS. . .

Answer 2

DECIDE HOW MUCH YOU’LL
NEED TO SAVE AND THE
TIME FRAME YOU WANT TO SAVE IT IN.

Question 3

THE BEST WAY TO BUILD WEALTH IS
TO START INVESTING EARLY. YOU
SHOULD START SAVING MONEY…

Answer 3

ONCE YOU’RE OUT OF COLLEGE,
LIVING DEBT-FREE, AND HAVE 3-6
MONTHS OF LIVING EXPENSES SAVED.

Question 4

Habits that are important for building wealth and becoming a millionaire

Answer 4

Consistently investing money and patience to give it time to grow

Question 5

THE PURPOSE OF AN
EMERGENCY FUND IS TO.

Answer 5

BE ABLE TO COVER AN UNEXPECTED EXPENSE WITH CASH AND PROTECT YOU FROM HAVING TO PILE UP DEBT WHEN SOMETHING GOES WRONG.

Question 6

The main reason for saving your hard-earned money are

Answer 6

emergencies, large purchases, and wealth building

Question 7

Once your out of school, have started your career, and have zero debt, your emergency fund should have

Answer 7

3-6 months of living expenses

Question 8

One of the main reasons we build wealth is

Answer 8

so that we can give to those in need

Question 9

The time value of money

Answer 9

A certain amount of money today is worth more than the same amount in the future

Question 10

The amount of interest charged on a debt but not yet collected is called

Answer 10

accrued interest

Question 11

A legitimate reason to use your emergency fund is

Answer 11

your car battery dying

Question 12

The five foundations

Answer 12

1. save a $500 emergency fund
2. get out of debt/loans
3. pay cash for your car
4. pay cash for college
5. build wealth and give

Question 13

banks and lenders use credit scores to determine

Answer 13

the likelihood that someone is able to repay debt

Question 14

your greatest tool to build wealth is

Answer 14

your income

Question 15

components of a fico score

Answer 15

debt payment history
debt level
length of debt history
new debt
debt type

Question 16

leasing a car is a method of financing where someone

Answer 16

makes monthly payments on but does not own the vehicle

Question 17

How do credit card companies make most of their profit

Answer 17

Charging interest to customers who only pay part of their monthly debt

Question 18

car lease agreements come with a stipulation that you must pay a penalty if

Answer 18

you go over the pre established mileage cap

Question 19

the debt snowball method involves paying off debts from

Answer 19

smallest to largest

Question 20

the smallest way to buy a car is to

Answer 20

pay for it in cash

Question 21

what is the best way to avoid falling into debt

Answer 21

only buy things that you can purchase with cash

Question 22

Credit isn’t a wealth-building tool, it’s a business that makes money for

Answer 22

credit card companies, banks, and lenders

Question 23

when looking over your credit report, it’s important to make sure

Answer 23

no lines of credit have been opened under your name without your knowledge

Question 24

The principal is

Answer 24

the total amount of the car loan, plus taxes, and fees

Question 25

how you spend and give your money

Answer 25

is a reflection of your personal values

Question 26

an example of an appreciating asset is

Answer 26

a home

Question 27

what are the three questions to ask yourself before you spend your emergency fund

Answer 27

1. is it unexpected
2. is it necessary
3. is it urgent